carol: welcome to "bloomberg businessweek." i am carol massar. genetically modified mosquitoes on, cut emissions to eliminate their own species and the zika virus along the way. some in the florida keys say, not so fast. david: some plan to fight climate change with beer. carol: we also take a look at if google is the new apple, taking a look at the company's first real threat against the iphone. david: all that ahead on bloomberg businessweek. ♪ carol: we are here with the

editor in chief and i want to -- at yourr focus at focus on section. these are small, store like places that were set up by an ngo with the help of idea.org. they are meant to bring young women in and explained to them about birth control. so many young people in zambia get pregnant. they do not have enough information about birth control. the way they are reaching them puttinging things like on they'll polish and making it an easier conversation. they are doing it in urban areas and finding it is really working. david: 30% of women under the age of 18 get pregnant and that is astonishing. how do they get this idea? >> they realize what they were doing -- they want to talk about reproductive planning, they did

not want to talk about that. when they did it this way, they were very responsive. they connected with different forms of contraception, very clever. >> they put personalities to the characters what are you a risk taker, are you consistent, and they helped matchup girls with the right kind of birth control or young women, i should say. david: the last few weeks for deutsche bank has been grim. there is rumor of a settlement of about a $14 billion. it is a bank that is not in great shape. >> $14 billion is a lot of money, the matter how you look at it. other problems creeping up on it. there are investigations in the u.k. about whether deutsche bank helped clients move assets or

money laundered for clients in russia in violation of sanctions. they have looming problems. they don't have some of the resources of banks that have a bigger wealth management component. it has created a problem for the german government where angela merkel has made a point that they do not do bailouts. the question is, how were they going to come back? a lot of bankers are being very supportive of deutsche bank. it is murky, and they will be facing problems. carol: european banks are lagging behind what has gone through the u.s. financial system, some restructuring. >> they do not have the retail banking to kind of bolster them. interest rates are really low. that is a problem for them as well. it is a continuing problem. david: this is a lot of work for the german ceo.

>> he really is. the other bankers have been has only been in that job for about a year, and he is confident that they will be ok and has been saying that the plummet in the stock prices because of speculators has been a lightning rod because government officials were saying that the bank was too speculative anyway. he has his hands full. carol: this story could -- the story will be around for a little while longer. let's talk about global economics, in that section, you take a look at what is going on with wind farms. -- wind is the fastest-growing source of alternative energy in the united states and that has turned out to be a big boon for rural areas, especially those that are

down on the luck because farmers in some of these areas are having such a hard time because corn prices have dropped. they are having trouble making a go of it. they can lease their land to windfarms and it is changing lives. we talked to a number of farmers for whom this is allowing them to hold on to the family farm. it means they don't have to sell off their land. it allows them to actually retire. it has been a big economic boom to these communities. david: the fight against zika continues. you profile and innovative way -- profile and innovative way -- profile an innovative way people are doing it. basically this kills off mosquitoes after a generation and generations of mosquitoes are extremely short.

they do it without you radiating the mosquito, it is a process that involved genetics and some antibiotics. resistance inbig key west and areas near key west as they try to test it out. it has been used in other countries and it looks like it may be successful, but in key west and nearby, there has been a huge amount of resistance. they are saying you do not know what will happen or what the side effects are. we spoke about what was going on. >> this is a mosquito that if you have ever been worried about malaria or zika, you know what it is called. it is famous for going anywhere and everywhere that pesticides cannot reach and that is why it is so dangerous and why the diseases he carries keep spreading. carol: we are all kind of on alert thanks to the gut.

thosee right about sterilizing insect populations. this has been done before. >> scientists have been trying to find ways to wipe this out. there are pesticides, but they still spray. they wanted to do something more sophisticated, they wanted to sterilize the insect. they have tried radiation, but the problem with radiation is it is a blunt instrument and winds up weakening the mosquito so much that it does not even try to breed so it cannot compete with regular mosquitoes. carol: there is a new method and that is what you go into depth talking about. >> it is a biotechnology company out of the u.k. byy were recently acquired r.j. kirk. this company specializes in crazy science projects like the apple that never gets brown.

they have been working on a genetically modified mosquito that has kids, but those kids never get past the larva stage. they are strong enough to breed, but when they do, the new mosquitoes never mature, they never become adults in a never bite anybody. carol: sounds like a smart idea. these are the male mosquitoes that do the heavy lifting. >> the females are the ones that bite. the males are the ones that seek out the females. the idea was what if we only genetically engineered the males with a super powerful gene that makes the case not able to grow up and then send them out to go out and do our work for us and find females that are hard to find, mate with them, and then the fruit of their loins no longer becomes an issue. carol: it sounds like it should work, but there are small areas of the world were this has been tested. >> long before zika was known to engay wasible thing, d

the real target in tropical climates. they were testing this in brazil and malaysia and panama. carol: which is where you went. >> that's right. carol: how did that go? >> at first i was worried that we were going to get eaten alive by mosquitoes. i was reminded that these were males that do not bite. it was just a mess. because theesting locals know about it and they would glance over and say oh yeah, here come the mosquitoes. carol: you mention all these places where they are testing it. what about the united states? >> nothing is happening here. we have been trying to be in the keys.

it at reasons -- as recently as 2011, but the locals have been fighting it to the and nail. when it comes to genetically modified mosquitoes in america is that the cutting edge of science is going head-to-head with the gml protest movement. there have been protests against ot. tech -- i see tech -- xytech in great britain and the u.s. they have been successfully fending us off for years. carol: the concern is we do not know the long-term effects of genetically modified organisms, so that is some of the worry. the picture we just painted of this amazing science project that could get rid of mosquitoes sounds wonderful, but what if someone told you it is coming to your neighborhood and that nobody had ever taken a look at what happens neighborhoods after this treatment, three years later? we know that in the history of

all things, there are unintended consequences. there was a time that we thought radiation did not have much of an effect and year later, we see people having health effects. our creativeg to director. is to showous thing mosquitoes, but we do not necessarily want to be alarmist because zika has been around for a while. this is specifically about the potential combatant for it. malesenetically modify and they release them so that they make with females and then basically their offspring dies. it is pretty morbid. david: let's talk about the line you have to toe. wo. -- to tow. >> the story is not necessarily

about the victim. it is about this lab which is developed these sort of genetically modified mosquitoes, and some of the concerns that is raising from the communities, specifically in the florida keys where it is being tested. when we hone in on that, we can separate from all the bad set that has been happening. you do it like a dating kind of thing. >> when i first read the story, it is kind of shocking. it is shocking about how harsh this seems. it is like the worst date ever in the insect world. so i basically created a dating profile for the genetically modified mosquito. is loosely referencing dating apps. up next, what revelations

about parts of donald trump's tax returns may tell us about the state of tax policy, overall. carol: who gets a fair shake and who does not. ♪

david: welcome back to bloomberg businessweek. week's opening remarks focus on the broader implications of what we are learning about donald trump's tax records. trump is not the first presidential candidate who has resisted releasing his tax returns. he is the first one in many decades who has not released any returns at all. mitt romney resisted for a while and eventually risk -- released two years from returns.

trump is the first one where -- since ford who does not released a single tax return. carol: although a piece of it came out courtesy of the new york times. >> we have gotten glimpses of pieces and if this point it is five years of returns we have gotten glimpses of. some in the 70's and a couple of years in the 90's. we have not seen those returns, but what the washington post and politico have reported as a result of information he provided to casino regulators in new jersey. carol: because he had to. >> because he had to, and that information has become public. what is interesting about those releases as they essentially show us the same thing in the most recent one, which is no

taxable income and notebook -- therefore no income taxes. carol: he is saying he lost money like almost $1 billion. how do you do that? >> it is simple. was not quite the simple, but imagine he borrowed $900 million to fund his casino and real estate empire. the money was not coming in to serve as the payments on those loans and he defaulted on the loans or he worked out something with the lenders so he would not repay it. carol: so are these personal taxes? >> it is complicated. donald trump and the corporate entities he runs were in some ways synonymous because they were largely structured as partnerships that were entirely or in -- nearly entirely owned by donald trump. the way to think of it is that the trump corporate entity for flows onto donald

trump's personal tax returns. carol: what he did is not illegal. >> right. the is the punchline or most interesting thing about this. let's take with the new york times reported and kind of unpack it. they basically said he reported a loss of a little over $900 million in theory because of the way the tax rules work, he is able to take deductions equal to $900 million. he can take that $900 million and deduct it over 18 years or up to 18 years. so if he earned a hundred million dollars over the course of 18 years, he can wipe out his income tax liability i taking a deduction equal to the amount that he earned. the lawsuit generated was equal to the amount he made. if you stop and think about that for a second and say that is not objectionable. i lost a ton of money, i should

be able to take that as a deduction. the difference with donald trump is that he almost certainly was not losing his money, he was losing other people's money. , that he and all likelihood was able to take advantage of and i have to hedge this because we have not seen the entire return is that he was basically able to lose other people's money, but then take the deduction for himself. carol: is that illegal if that is what happened? >> that is legal for a couple of reasons. this gets unbelievably --plicated, but to keep it normally, if you stop paying loan -- if a bank loans you $1 million or gives

you a mortgage to buy a house. you don't oh taxes on the receipt of that money. it is a loan you are repaying. if something happens and they forgive the loan, normally you oh taxes on what they have given you up to that point. because it is income. it is no different than your employer giving you money. normally that gives rise to what is called cancellation of debt income. there are some exceptions to that. areexception is if you insolvent and another example is in 1993, congress gave a benefit to the struggling commercial real estate industry, which is to say if the loan that went bad was a real estate loan, many you would not have to count that as income. in all likelihood, donald trump was taking advantage of this. carol: what i love about your story is that you realize whether it is donald trump or

mitt romney, there are loopholes or tax strategies that a small can of our income strata take advantage of, most americans cannot. >> that is the most interesting thing we saw, both in 2012 and 's partiald trump return here, which both shows examples of how people at the very top of the strata have available to them, things that are either straightforward tax code provisions like the one that donald trump probably took advantage of, or the case of romney, more complicated trust that they can -- trusts that they can use to avoid income taxes, strategies and code provisions not available to most americans. david: up next, could patagonia save the world? ♪

carol: welcome back to bloomberg businessweek. david: you can also listen to us on the radio on sirius xm. in the features section, patagonian's plan -- patagonia's plans to combat climate change. carol: you write a route -- right about patagonia and its provisions. >> it looks like they are doing sort of a trail food. they did a smoked salmon and a foil, prune and nut bars, certain things you would take on a trip in patagonia. as they explained to me, it is about shelfstable goods entering the markets with sub that is not perishable.

done some real due diligence on the sourcing to make sure it is environmentally sound. carol: there are also known for their concerns about the environment. it is part of their mission ended -- they are bringing that into what they are doing in the food area. >> they are taking what they have learned from organic cotton and sourcing torture free goose down and even taking trillium-based rubber out of dry suits and wetsuits. rubber out ofased dry suits and wetsuits. carol: you spent some time with the people involved in this, including the founder and the person who is driving patagonia provisions. what do you get from them about their approach? >> for the founder, this is a legacy play. he probably wrote his legacy on grand laws in the past.

a celebrated outdoorsman. he thinks that food can make the bigger difference. he wanted his company to be an example of how you can improve the environmental welfare, but there is a limit. there is a limit to the footprint, there is going to be one. thatfood, they are finding you could actually grow some food that is good to eat but also restores the soil. patagonia talk about and i was intrigued. i have done some things with support lay, who are very concerned about the impact that production has. this regenerative agriculture. they are very involved with this. >> they want to be. the question that is raised is

whether or not it can scale. what they are interested in doing is seeding these projects that might bring a new week into our supermarket. the big idea is to try to do agriculture more the way nature does it, and in a way that when you hear that, -- a person is with downo great parkas, stick with that, but when you want to take pressure off of wild places, you have to intensify agriculture. carol: up next, china gets a new tech billionaire. david: google wants in on amazon's territory. we will have the company's answer to echo. ♪

david: welcome to "bloomberg businessweek." i am david gura. carol: i am carol massar. the google phone that they hope will be an iphone killer. david: and problems with the previous in the u.s. carol: an exclusive interview with the chinese tech billionaire that one a 1.5 year battle with uber. david: that is ahead on "bloomberg businessweek." ♪ david: we are here with the editor and chief. let's talk with the global economic sector. a lot of people were in mexico

talking about the donald trump candidacy. here, all of the interest in making it easier for the mexicans and that u.s. to send more money back? >> the value of the peso has dropped against the dollar. you can buy more with u.s. dollars sent to mexico. happening is that is good for immigrants sending money home. it has allowed people in mexico to take care of their needs better, to take care of their houses better. it is a weird byproduct of the trump candidacy. he is helping the folks in mexico. not just the folks in mexico, but illegal immigrants. i talked to one who is able to get more money to his family because of it. maybe people don't realize it is because of trump, but they are aware and are taking advantage of the conversion rates.

carol: the mexican economy is not great, so this is helping them out. >> it is and i'm sure that is not what he intended. carol: you look at what seattle is looking to do, safe places for heroin addiction. >> it has been tried in canada, but not in the u.s. the idea is to avoid overdoses and prevent deaths. that are considering setting up centers allowing addicts to shoot up in a supervised way. it is not meant to encourage drug use, but if there is an overdose, people will be helped as opposed to being left to die. law enforcement is on board. david: that's talk about the controversial nature of this. the mayor of seattle is saying "if we can help people, why wouldn't we help people." it is not without controversy. >> federal drug laws are pretty

strict. many states are saying marijuana is legal, but it is no a violation of federal law. there is a question on if the feds will crack down on it. david: is it a problem in seattle? >> it is a problem everywhere. david: the founder of didi, tell us about him and the company he founded. >> didi is a hong kong taxi, a competitor to uber. they played hard with their homegrown competitors and uber. r in china through in the towel. date invested in didi and sold their operations to them. didi is one of the few companies that has been able to moun a successful fight againstt uber. carol: almost shocking. this is a gentleman that does not do many interviews.

call the founder of didi the uber-tamer? >> he is the one entrepreneur who beat back uber. the story is remarkable. uber is six years old. didi is four years old. the story starts in alibaba where chen way is a mid-levelthn sales manager. salesworking for a manager. they are, along with other executives, brainstorming startup ideas. early 2012, they see the rideities of a british handling company called halo. it was working with a licensed taxicab in london, the black like to create an uber- experience.

i wonders, why can't we do this in china? they invest $100,000 in this company. to their horror they realize there are 30 other companies in china that has done this too. no one just clones companies in china, it is a mass migration of entrepreneurs into an idea. they start in 2012 in beijing. it is called hong kong taxi. they basically try to uberize the yellow stripe taxis in china. carol: do they have any advantage? there were other companies. it was a crowded space. do they have advantages over their competitors? brad: they did. they were taking the halo approach to work with licensed taxis. many took an uber approach trying to work with licensed

chauffeurs of town cars or limos. there were not enough of those cars in beijing. had trouble.es some had more early investment from silicon valley venture capitalists trying to replicate uber's success in china. didi took a more licensed approach with yellow cabs. that worked better. mentality of alibaba. they called each other classmates. they would see competitors get an exclusive contract to talk with cabdrivers at airports. they would work the bus stations. instead of giving away iphones, they targeted young people. they gave apps to young drivers. i would say that early was their advantage. things did not take off until 2013. cheng wei is having problems

fundraising. he realizes alibaba has invested in a competitor. what happens, long story short, the alibabato archenemy. when things take off. alibaba and ten cent are archenemy and funneling volume in payment services. those giants fight each other, that is when they take off. david: google is going after the apple iphone. mark was there when google unveiled its pixel smartphone. carol: they announced new phones. the strategy with the new phones is different than the past. mark: right. google has done phones before,

but it has not been their own. after talking to executives today, we learned they have a new strategy. they have been proponents of a nexus strategy. they bought the software and them to bring their software to their hardware. they partnered. now, google has a new phone called made by google with phones starting at $649. they are called the pixel and the pixel xl. they run a new version of android and new functions like google assistant. the strategy is that google its owno develop supply chain. they are doing custom work inside the phone. they're looking to the future and how to build more custom work and a successful unit. carol: why is google, who has had a successful model, putting

out the android system for hardware makers to work with and come up with devices, why is google in the hardware game? apple hasiphone from been extremely successful because of the premium price point and premium features. for google to keep its own software, android, and he services like gmail, google maps, google voice very prominent, they have to come out with their own hardware to promote these features. the time was right given that google is solidifying its services lineup. carol: google is going head-to -head with apple in the smart phone market. google announced another product going head-to-head with amazon with its echo. google is introducing its own home speaker market. mark: amazon echo has been surprisingly popular.

apple is working on its own amazon echo competitor. google announced google home, a speaker system for the home. today, they gave more details like the pricing etc. it will be a key excess rate for the home when it comes out ahead of christmas. next year is when it will be more powerful. some google executives were talking about the company working on 2 software developments, one for apps and one for hardware around the house. this means developers from companies like uber, twitter, and facebook can create applications for google home to interact with their services via google hardware. the other platform involves other hardware. can make like phillips software packages making existing accessories compatible with google home. so i can say, google, turn on

the lights, and i will interact through the speaker. carol: it is interesting to see them going, as i said before, head-to-head with apple in the phone market, and going after the amazon echo as well. what is it to with its relationship with hardware makers it has worked with for years, samsung or lg? mark: google explained they're going about this with a careful balance. the android division, the platform at the heart of the ,ompany, 1.5 billion devices players in china, india, around the world, there will be a firewall. like samsung and lg is treated as equals on the android platform, so is this hardware. just like samsung gets treatment from google, so will google's

own software division. the key is believing what google says about the firewall, and trusting that there will be a line between google platform company and google hardware division. carol: why it is not next being usprevious these days -- a pri these days.

carol: welcome back. i am carol massar. david: i am david gura carol:. to win overd american consumers with the recently redesigned prius:. this necessitates to lot over the life of the prius. even silicon valley and hollywood stars were driving it. now, that position is taken by tesla. the same way that hybrids were considered to be revolutionary at the time, people think about that as electric vehicles. people want to move on to what is new, hot, and cool. that has been to the detriment of the prius. carol: the previous isn't cool? >> not that cool. they redesigned the prius to make it appeal to a wider design of people. the redesign went from what was

admittedly not a good looking car to what is now maybe a little more out there than the typical person may want for this type of vehicle. it is very flashy, sort of angular look that is not particularly popular with u.s. buyers. carol: people who have owned a prius are not necessarily buying another? >> more than half the people who had a prius would buy their next car as a prius. that has fallen to the lower 40% pew that is not a good sign long-term. 25% on are dropping down the value of prius sold in the u.s.. carol: when prius came out, you

mentioned test p or they are high and then coming out with a less expensive model. there are more choices when it comes -- >> a lot more choices. all011 there were 3 electric or hybrid vehicles. now, there are 33. a big difference. toyotas, ity loved is competition in the brand. the rav4 has its own hybrid version. carol: what does toyota say? that the prius is not as popular as it used to be? >> it has nothing to do with redesigning the car to make it look somewhat strange to a lot of people, but it has to do with cheap gas. the big appeal is it gets a great mileage. if gas is cheap, people want an suv. carol: the redesign, they sell this in japan. >> it is extremely popular

there. the prius came back this year to be the best-selling car in japan. the brand is the 31st selling car in the u.s. a big difference in the style. i asked a coworker, what do you think of this? they said, i like it. it is like fast and furious: tokyo drift. an issue. be there is a difference between what the younger drivers in japan want versus what the younger ecologically-oriented drivers here want. carol: it is hard when you have tesla on the other end of the spectrum, beautiful design inside and out. a prius is small. >> it is cozy. so many americans have gotten used to larger cars and suvs with a lot of storage space and

room. it is difficult for what started as a subcompact that is now a compact to midsized car on the but still without a lot of room. carol: toyota is not giving up on prius? >> no. it is a big deal for them. if you think hybrids will be the low-gas car for a long time, you just have to make it look better. david: utilizing digital payments. ♪

david: welcome back to "bloomberg businessweek." i am david gura. carol: i am carol massar. you can also listen to us on xm radio, in new york, in boston, and washington, d.c., and in the bay area. the designfocus on section, a studio with an idea for creating a physical dimension for online payments. people started using credit cards, it is easier to spend money without thinking about it. you do not have to go to the atm and put cash in your wallet. you could take out your card, keep so muchbe not track, especially if you are buying things you couldn't really afford. carol: you write about an individual that notices with his own daughters. >> a designer with 2 daughters.

many would give them allowances when they were younger, he would give them cash. they would meticulously budget. when they were teenagers, he switched from cash to a debit card. they were constantly going broke. they could not keep track of their money. he started thinking, is this because my girls are older and less responsible, or the way they are spending money. he did an experiment. carol: what was the experiment? >> he came up with a device that is like any long dated token -- an elongated token. it is like a digital wallet that you have to manually load money onto, swipe your finger across it, and think about the money you are spending in the same way that you have to think about handing money to the

clerk. carol: it is a fixed amount? >> yes. and every time you spend money, spent $350, just here is your new balance." carol: you are right. there has been research that has looked into the disconnection with money, especially with credit cards. >> there has been a lot of research that shows people are less responsible with credit cards, even setting aside the fact you can spend money you don't actually have. the action of paying with a card rather than cash, you spend more money here and you value those -- you values pd those purchases less it you value those less. there is a disconnect. companies that design payments

like it when you spend money. this.d about he said we did not look for a partner. it would probably be hard to find one. there are more niche cases where this could come up here places looking to help people budget money, they can offer this to making more mindful. that is one case, but i do not think it will become the replacement for the increasingly easy ways to spend cast. carol: taking us to chuck e. cheese. david: here is editor julian goodman. >> you are right. anyone who has kids, you have probably spent time there. there are changes. >> they are phasing out the 'smous tokens with chuck e face on them. they're going to an all-card system. carol: that is a big change. tokens have been part of the fun. >> for chuck e. cheese they are

a moneymaker because you give money up front. then you get tokens. whether you spend them or not chuck e. cheese keeps your money. you can still trade them in for values on your car. it is for the benefit of the chain, but more easy for them to keep track of. carol: as a parent, many times i tokens,ked home with and then i forget to bring them back. d> and if you lose your car you can get the credits returned. it is making use of better technology. carol: having said that, some people collect tokens. some of them are collectible. there are variations. >> there have been many designs. these to be printed with the name of the location they were destined for. there is one mythical set that was printed for a california

restaurant that were misprinted and had to be returned to the m int. a handful were saved from the melting pot here they go for almost $1000. carol: what was your favorite story? david: deutsche bank. it looks at the proposed settlement with the doj at $14 billion of the debate in the bank, the debate about the size of it. looking at the condition of the european bank. it is not in great shape. 10 year plan. a a lot more to do. carol: i love the history of going to beijing and talking to the founder of didi. we got insight to the competition between didi and ub er. the growth of the ride-handling services in the chinese market. how didi beat uber, which is phenomenal. a lot of nuggets in that story.

bloomberg businessweek is available on newsstands. david: and online. carol: more bloomberg television starts now. ♪

test"ing up on "bloomberg the stories that shaped the week. the pound takes a pounding. the hand of an ecb taper sends markets spending. >> everyone will hit the door at the same time. >> google leads headlong into hardware. a message in the september u.s. jobs report. >> if you are janet yellen call it a goldilocks job report. not too hot, not too cold. matt: a fed hawk has warned a hike may come